PACS JA 7.18.24 redacted.pdf

VISN 15 Picture Archiving Communication System VA-24-00022027

4. Statutory Authority: Pursuant to Federal Acquisition Regulation (FAR) Subpart 16.505(a)(4), this brand name requirement is being justified and approved as an exception to fair opportunity via Section 41 U.S.C. 4106(c)(2) as implemented by FAR Subpart 16.505(b)(2)(i)(B), entitled “Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.”

5. Rationale Supporting Use of Authority Cited Above: Based on extensive market research, as described in Section 8, VA has determined that only brand name Philips PACS is capable of meeting VA’s requirement for continued functionality.

The current VISN 15 Radiology architecture is based on existing Philips PACS, and VA must have compatible support with the existing architecture functionality for continued operational availability. VHA Directive 1104 mandates that every facility within each VISN utilizes the same PACS for Radiology imaging. Philips PACS architecture is currently being utilized throughout VISN 15 for the receipt, storage, transmission, display for interpretation, and the review of all radiology images per this Directive. The current VISN-wide PACS system services eight (8) medical facilities, and 43 Community Based Outpatient Centers. The existing Philips PACS platform is interoperable with a host of VISN 15 and VHA systems including VistA/CPRS, VistA Imaging, Compass Routers, PowerScribe, Canon Vitrea, NexoDose, and many others. Changing from Philips to another PACS platform would require significant costs estimated at $12 million for the configuration, hardware, troubleshooting, testing, training, and deployment, as well as data migration. Additionally, the redevelopment of compatible interfaces to the aforementioned systems would introduce additional contract actions and unknown costs for the various vendors to coordinate with the new PACS vendor for interface programming, implementation, testing, and training. It is estimated that approximately 15 percent of the existing architecture requires upgrading, as the last major equipment upgrade took place within the last 12 months under an existing VISN 15 contract. As such, replacing existing equipment with hardware from a new vendor needlessly replaces approximately $250,000 of hardware that has remaining usable life.

This hardware is specifically configured for the Philips PACS system and cannot be reused for another vendor’s PACS solution. Additional time would also be required after deployment to migrate all data from the current Philips PACS system and decommission the existing system once all data is confirmed to be migrated successfully. This could bring a total migration timeline closer to 36 months for fully activating a new PACS system and sunsetting the current Philips system/contract.

During this time clinical care would be disrupted and function at a lower productivity level as clinical staff were pulled to other tasks involved in configuring, testing, and training on a new PACS system. Overall costs to migrate, maintain dual PACS systems, engage all technical and clinical staff required, and to develop interoperable interfaces with other systems used in VISN 15 would exceed the above noted estimate of $12M.

This cost estimation would further inflate if there were any delays or failures in the implementation to a point in which clinical care could be detrimentally impacted and expensive Community Care imaging would have to be utilized by VISN 15 facilities. In this scenario VHA would also lose hundreds of hours of clinical time at a significant cost based on Radiologist and Radiology Technologist salaries.

As software is upgraded and requires new or advanced hardware to properly operate, Philips identifies these hardware needs for the VA to evaluate under the contract.

Pending VA approval for the new hardware requirements it is then procured by Philips and assembled into a "Philips Intellispace PACS Server System" before being provided to VA for the purpose of running the PACS system. This hardware includes switches, servers, uninterruptible power supplies, and data storage equipment necessary to host and store the data/software application. Philips creates the required hardware package, programming it with the necessary configuration and software, then installing it on-site in VISN 15. The hardware must be Philips-brand name hardware, as no one else possesses the technical knowledge to create that hardware stack that is certified to their PACS system operating requirements. The Managed Services model offered by Philips and sought by VISN 15 via this contract is unique from other PACS vendors as it provides a singular fixed cost contract model/methodology to upgrade software and hardware while keeping active maintenance and support on the system.

Additionally, the required training must be provided by Philips. Philips does not train third party organizations to provide end users training on their platform. They require that all training on the Intellispace PACS platform be performed by a Philips employed educator.

Since the PACS architecture is made up of four (4) components it is imperative to ensure that each component receives regular updates, patches and upgrades. If one component, or even a portion of a component, reaches its end-of-life, not only would it no longer be able to receive patches or updates, but it would not be able to communicate with the other components in the architecture as effectively or possibly at all. The PACS architecture would no longer securely store and digitally transmit electronic images and clinically relevant reports. As this data is Protected Health Information, it is the VA’s obligation to protect that patient information securely and be capable of transmitting it for clinical care of patients. Only Philips, or a reseller can provide the necessary software subscription, licensing, installation/implementation, hardware, training, maintenance, and updates because of the propriety source code required to develop and implement software updates. This proprietary source code also extends to the Optional Task items for supporting the maintenance of the existing VISN 15 Intellispace Cardiovascular (ISCV) deployments that are tied to the Radiology PACS system as a long-term storage data archive. Access to this code is also needed to ensure all services provided are properly configured. No other source is capable of providing the required Philips PACS software and hardware maintenance.

6. Efforts to Obtain Competition: Market research was conducted via conversations with other VA VISNs to understand the PACS vendor market, details of this market research are set forth in Section 8 of this document. Additional research into potential competition was conducted via informal market research and through conversations with Philips to identify vendors capable of supporting their proprietary hardware and software. This effort did not yield any additional sources that can meet the Government's requirements. However, the undersigned VA technical representative determined that limited competition is available among authorized resellers for brand name Philips PACS. In accordance with FAR 16.505(a)(4)(iii)(A)(1), this justification will be provided with the solicitation to all appropriate NASA SEWP V GWAC holders. Furthermore, in accordance with FAR 5.301, 16.505(b)(2)(ii)(D) and 16.505(a)(4)(iii), the award notice for this action will be synopsized on the Contract Opportunities website and this justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: In order to remove or overcome barriers to competition in future acquisitions for the requirements described herein, the Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

8. Market Research: VA’s technical experts conducted market research starting in January 2023 through March 2024. Specifically, similar PACS brands have been reviewed from other vendors, such as General Electric, McKesson/Change Healthcare, Agfa-Gevaert. This Market Research also included online reviews of alternative PACS system technical data and marketing brochures, conversations with existing VA customers on the usability and implementation challenges, and review of past procurements. The products from General Electric, McKesson/Change Healthcare, and Agfa-Gevaert cannot offer support for the existing system, as only Philips and its authorized resellers are able due to the proprietary element as discussed above. These vendors additionally do not currently provide a managed services contract model, due to this the costs for the lifecycle maintenance, and upgrades of the system are not completely accounted for in a fixed price contract methodology. For PACS systems from these other vendors a maintenance contract can be utilized to gain vendor support and software upgrades, however when a hardware upgrade or replacement is necessary an additional contract becomes necessary. This can result in outdated hardware whereas the Philips managed service contract provides for all lifecycle costs to keep the PACS system operational and up to date for all VA network security requirements. In scenarios where VA security requirements or operating system (OS) end of support require rapid action to ensure system security and operational efficiency a managed service contract is positioned to address all system need immediately whether they be hardware, software, or operating system related without additional contracting efforts or time delays. This ensures that Veteran data is better protected, and that the system maintains maximum uptime for clinical care requirements.

Based on the market research, it was determined that each of these alternative products would require a significant investment of approximately $12 million of additional funding, as outlined in Section 5, and would also divert clinical staff focus from patient care tasks. Based on the managed services contract model, the additional cost outlined in Section 5, and impact to clinical care if changing to a different system, it was determined that the continued use and upgrade of the Philips PACS platform is technologically required for VA at this time.

On January 23, 2024, the Contract Specialist (CS) issued a Request for Information (RFI) on NASA SEWP to Groups B, C and D. On March 31, 2024, the RFI closed with one (1) response received from Four Points Technology, a Service-Disabled Veteran-

Owned Small Business (SDVOSB). The response was sent to VA technical experts for review. It was determined by VA technical experts that the only response received, from Four Points Technology was not capable of fulfilling the requirement due to the documentation it provided which demonstrated it could only meet the requirements through partnership with the Original Equipment Manufacturer Philips, a Large Business. While this partnership could deliver the technical requirements of the VISN 15 PACS platform, it does not meet the VA Acquisition Regulation (VAAR) 852.219-75 VA Notice of Limitation on Subcontracting – Certificate of Compliance for Services and Construction, which requires 50 percent of work performed being completed by the SDVOSB itself. Four Points maintains that it would provide accounts receivable, contract management, and project control/oversight services, but these do not account for a complete 50 percent of the overall actions.

On February 7, 2024, the CS emailed Philips directly asking if they have any SDVOSB authorized resellers that were capable of meeting the requirement that at least 50 percent of the work performed be completed by the SDVOSB or Veteran-Owned Small Business. On February 14, 2024, the Philips representative responded with, “Yes, Philips does have authorized SDVOSB resellers on the SEWP V and CIO-CS GWAC contracts. In addition, they do abide by the LOS requirements.”

On February 15, 2024, the Contract Specialist issued a second, unrestricted RFI on SAM.gov. On February 22, 2024, the RFI closed with one (1) response. received again from Four Points Technology. The response was sent to the VA technical experts for a technical analysis. It was determined by VA technical experts that the only response received was found to be capable of meeting the needs of this requirement.

Additional market research was conducted in January 2024 by utilizing NASA SEWP V GWAC Provider Lookup Tool for Philips. It was determined that there are several SDVOSB authorized resellers of Philips software on the NASA SEWP V GWAC.

Based on the results of the review set forth above, there is reasonable expectation that two or more SDVOSBs will be able to provide the required brand name Philips PACS.

Therefore, given that there is a reasonable expectation of competition between at least two capable SDVOSBs, it has been determined by the Contracting Officer that the subject Request for Quotation will be released as a SDVOSB set-aside under the existing NASA SEWP V contract vehicle, under the Value-Added Reseller NAICS code 541519.

9. Other Facts: None.

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

11. Fair and Reasonable Cost Determination: I hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable based upon discounts among NASA SEWP V GWAC holders who are resellers of the required brand name PACS software application described herein. Additionally, NASA SEWP determined that the catalog prices on its GWACs are fair and reasonable. Finally, price analysis shall be conducted by comparing the successful quote to the Independent Government Cost Estimate.

12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

13. Legal Sufficiency Certification: I have reviewed this justification and find it adequate to support an exception to fair opportunity and deem it legally sufficient.